Is Silver a buy or sell in February?
- Silver price is still unable to advance above $26 resistance
- Silver price should continue to rise, according to analysts
- As long the price is above $22 support, there is no risk of the trend reversal
The global stock markets have weakened this Wednesday; Wall Street’s three main indexes extended correction from the recent highs but remain in a bull market. Silver price remains supported by uncertainty over the global economic future, but it cannot stabilize above $26 resistance.
Fundamental analysis: Silver price should continue to rise according to analysts
Financial markets continue to lose their value this trading week, and the dominant impact of Covid-19 could keep Silver prices afloat. Silver usually rises when the economy is in a slump, and the price of this precious metal should continue to rise, according to analysts.
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The vaccine immunization will not soon end the Covid-19 crisis, and the governments need to take significant action now to help citizens. It is also important to say that many companies have problems with cash flow and continue to operate with loss.
“The market is kind of in a wait-and-see mode. Investors want to gather more information from the earnings season, they want more confidence from the Fed, and we should get a big insight into that today,” said Craig Erlam, senior market analyst at OANDA.
Good earnings reports would offer support to a strong global recovery, but bad results could also add pressure for global stock indices. The U.S. Federal Reserve will support the economy for as long as needed, but it will probably keep its monetary policy unchanged at the monetary policy meeting this week.
U.S. Treasury Secretary Janet Yellen spoke today with British Finance Minister Rishi Sunak about global economic recovery support.
“During the call, Secretary Yellen highlighted their shared priorities, including cooperating to end the pandemic and support a strong global recovery, fighting inequality, and forcefully addressing the threat of climate change. They also discussed the need to find multilateral solutions to global economic problems, including the challenge of “efficiently and equitably taxing the income of multinational firms,” the U.S. Treasury reported.
Technical analysis: Bulls are focused on breaking the resistance level at $26
Silver extended its correction from the recent highs above $27, but despite this, the silver price remains in an uptrend, according to technical analysis. As long the price is above $22 support, there is no risk of the trend reversal.
The important resistance levels are $26, $28, and $30; $24 and $22 represent the critical support levels. If the price jumps above $26, it would be a signal to trade Silver, and we have the open way to $27.
On the other side, if the price falls below $24, it would be a firm “sell” signal, and the next target could be around $22.
Silver price remains in the bull market, and as long the price is above $22 support, there is no risk of the trend reversal. Financial markets continue to lose their value this trading week, and the dominant impact of Covid-19 could keep Silver prices afloat. According to analysts, governments of many countries will continue to support economies, and the price of this precious metal should continue to rise.